A basic fundamental analysis of companies is always not enough to pick stocks that have the potential to generate solid returns. In such a situation, expert advice helps in making the right investment decision. In fact, you could simply follow broker rating upgrades, as they have a deeper insight into stocks, the sectors and the overall economy.
Brokers directly communicate with the top management. They also thoroughly study the publicly available documents and attend conference calls.
In addition, brokers scrutinize the fundamentals of companies and place them against the current economic backdrop to find out how the stocks will fare as an investment option. Therefore, by following broker rating upgrades, you can easily find attractive stocks.
But solely depending on broker upgrades is not advisable. You must take into consideration a few other factors before adding a stock to your investment portfolio. This way you can ensure steady returns.
Picking the Winning Strategy
We have a screening strategy that will help in your search for potential winners:
Broker Rating Upgrades (four weeks) of 1% or more: The screen selects stocks that have witnessed broker rating upgrades of 1% or more over the last four weeks.
Current Price greater than $5: The stocks must be trading above $5.
Average 20-day Volume greater than 100,000: A large trading volume guarantees that the stock is easily tradable.
Zacks Rank equal to #1 or 2: No matter whether market conditions are good or bad, stocks with a Zacks Rank #1 (Strong Buy) or 2 (Buy) have a proven record of success. You can see the complete list of today’s Zacks #1 Rank stocks here.
VGM Score of A or B: Our research shows that stocks with a VGM Score of A or B when combined with a Zacks Rank #1 or 2 offer the best upside potential.
Here are the five of the six stocks that qualified the screening:
Builders FirstSource, Inc. (BLDR - Free Report) , based in Dallas, TX, manufactures and supplies building materials, manufactured components and construction services. Its earnings are expected to grow 6.9% in 2020. The stock, carrying a Zacks Rank #2, has witnessed 10% upward revision in broker ratings over the past four weeks.
Headquartered in Hong Kong, Melco Resorts & Entertainment Limited (MLCO - Free Report) develops, owns, and operates casino gaming and entertainment casino resort facilities. Its earnings are expected to grow 30.3% in 2020. The stock, sporting a Zacks Rank #1, has witnessed 20% upward revision in broker ratings over the past four weeks.
JELD-WEN Holding, Inc. (JELD - Free Report) manufactures and sells doors and windows. This Charlotte, NC-based company’s 2020 earnings are expected to increase 30.6%. The stock, carrying a Zacks Rank #2, has witnessed 12.5% upward revision in broker ratings over the past four weeks.
Based in New York, AXA Equitable Holdings, Inc. (EQH - Free Report) is a diversified financial services company. Its 2020 earnings are expected to rise 3.2%. The stock, carrying a Zacks Rank #2, has witnessed 12.5% upward revision in broker ratings over the past four weeks.
EVO Payments, Inc. (EVOP - Free Report) , headquartered in Atlanta, GA, is an integrated merchant acquirer and payment processor. Its earnings are expected to increase 16.9% in 2020. The stock, carrying a Zacks Rank #2, has witnessed 9.1% upward revision in broker ratings over the past four weeks.
Get the rest of the stocks on the list and start putting this and other ideas to the test. It can all be done with the Research Wizard stock picking and backtesting software.
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Disclosure: Officers, directors and/or employees of Zacks Investment Research may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material. An affiliated investment advisory firm may own or have sold short securities and/or hold long and/or short positions in options that are mentioned in this material.
Disclosure: Performance information for Zacks’ portfolios and strategies are available at: https://www.zacks.com/performance